Identities are valuable and we suck at managing them!

Can Blockchain Rescue our Identity from the Digital Abyss?

Identities are valuable and we suck at managing them! Our modern identity management systems are currently in crisis and it seems this is really just the status quo, but does it need to be?

It doesn’t take a lot of digging online to quickly find reasons why identity safety is such a paramount issue. Tools like Have i been pwned? show a range of concerning examples of major institutional breaches that have leaked millions of personal data files. The centralization of identity databases, both physical and digital, is creating these inevitable fail points that are eroding the systemic value of our personal data.

There’s a clear problem facing identity that will only become worse as data management systems painfully try to scale to the demand. The good news is there’s hope blockchain can be of assistance. The unfortunate part is that it is still of course very early, making the problem substantially more clear than the solution.

Why is identity management a problem?

To understand why identity security is a problem it seems vital to first understand why our identity has value. The value of identity can be seen in a number of ways in our lives, acting as the proof of membership to our various organizations or facilitating the creation of value while we sign on the dotted line opening a new gateway of credit. Our Identity has value because it holds the power to both create wealth and prove our membership, whether for good or not.

Identities are valuable and we suck at managing them.

The problem with identity security then is that this massively powerful asset is being left vulnerable around every corner; a problem for the individual and the institutions that serve us. Individually, we need better awareness and education on the value of our identities and especially how to protect ourselves as we move deeper into the digital world. Institutionally, centralized identity management systems are just not working. There’s a demand for identity infrastructure that can withstand the inevitable scaling of members while protecting against the more classic issues around itself like fungibility and centralizing points of failure.

Centralizing identity hurts us all, but hurts some more than others

Among the mountains of issues and challenges facing identity management, there have been a couple of themes in particular that have percolated to the top. Firstly, you would likely have to been living under a rock to not be at least aware that our data isn’t safe anymore in the custody of other organizations. Shocking headlines are being written about substantial new hacks on a recurring basis and digital companies continue to build business models circulating around the collection and curation of customer data.

The centralization of our personal information is a problem for both the physical storage systems and their digital versions alike. For those systems still dependant on paper and ink, the obvious issues face them as natural disasters increase worldwide and ideological shifts create radical movements of populations. These paper system of identity are often warehoused and instituted from brick and mortar locations with few redundancies in place creating substantial vulnerabilities.

In addition to the issues surrounding the storage of our identities, the explosion of data collection and digital marketing has brought on new challenges to the topic. Data collection and the business models that are built around it create a demand for our personal identity on a level that far outpaced the analog data collection space previously.

The competition in the marketplace for high-quality personal information is fierce and the current trend is a profitable one. Many tech businesses are mining for our personal identities and their motives range from creating competitive advantages within their own products to bundling and leveraging the data into income. However, no matter the motivations, as the data pool of identity information grows, the competition in the market for this valuable resource will push their mining efforts deeper into our lives to better knows us intimately.

Despite the best efforts of those most interested, the infallibility of these storage systems tasked with the safety of our personal identities has remained unreachable. There is a need for infrastructure that can be built and managed which brings us closer to the pursuit of total security surrounding our identity.

It is likely unsurprising that those who are most affected by this issue are the populations and persons who are already most vulnerable for a suite of reasons; political, economic, natural, or otherwise. Strong identity systems are in high demand as we reach the highest point of human displacement on record and central points of authority are shaken with volatility

It is seemingly fair to say that the issues surrounding identity management affect everyone directly and otherwise. However, the weaknesses of centralized data storage and the volatility of identity security for vulnerable populations are two especially poignant themes that have potential to find some relief from the healing powers of the blockchain.

Can Blockchain solve this?

Fungibility and mutability: These two concepts, fungibility, and mutability are very much linked to the core meaning and value of identity. For identity to work and provide value it needs to be invulnerable to duplication and have no potential to be altered on either the individual level of the holder or on a collective scale where the data is stored and held.

To be non-fungible means that only one of its kind can exist; think of collectible cards like Magic the Gathering or O-Pee-Chee baseball cards. And like any other scarce valuable the individuality of it is important and is corrupted by imposters or duplications. Non-fungible identities could be a huge help in many areas that they act as a gatekeeper, for example, it would make it that much harder to access underage drinking when the duplicate I.D. market drys up on campuses everywhere. More seriously, the non-fungibility of identity could also help prevent issues on a higher level of passport fraud the and abuse of social services such as healthcare or education.

Similarly, the potential immutability of blockchain can be a massive asset for data storage and management. An identity on an immutable blockchain would mean it is safeguarded from malicious changes or even destruction, both retroactively and not. An identity which is unchangeable has a host of benefits which protect both the users from the system and the system from the user.

Decentralization doesn’t solve all the problems, but it’s a great start

The idea of decentralization as a security measure is pretty simple, it has no single point of failure. Identity has rarely, if ever, been afforded this feature of true longevity protected against all of the traditional ailments that are afflicting personal data storage presently. Decentralization returns the control and value of our identity back to the individual instead of predominantly benefiting the various custodians our information is housed by.

Civic is a great example of a use case which is providing blockchain solutions to both sides of the personal data swap market. Civic has leveraged blockchain to allow users to hold and retain ownership of their identity data and removes the need for companies and organizations to centralize and compromise our identities. To really unravel how and why tech like Civic is promising, dive into our beginner’s guide to blockchain identity verification.

In addition to creative solutions for the personal data marketplace, blockchain’s decentralized format is well suited to help foster new solutions to the crisis surrounding identity management in vulnerable populations. Recently, blockchain has found utility in refugee situations, like that in Jordan’s Zaatari refugee camp, where biometric technology linked with blockchain identity data management is being harnessed by the World Food Program and their Building Blocks initiative.

Building Blocks by the WFP aims to use “blockchain as a means of making cash transfers more efficient, transparent and secure” and in doing so, return the ownership of a refugees financial and personal identity back to them.

Blockchain projects circling around the better storage and management of identity are in their undeniable infancy. But the early signs seem to be pointing towards a positive and useful fit for blockchain as the demand continues to proliferate. Blockchain solutions to identity are going to be slow to roll out as merging and replacing legacy infrastructure is a tremendous task that currently has a little platform to launch from. Massive areas and vulnerable populations are not well positioned to be aided by a digital technology that relies so heavily on electricity and the internet.

Wrapping Up

The value of our identity is on a rise and currently, the storage systems that safeguard it are buckling as they attempt to scale. Furthermore, trusting our identity to others is quickly eroding and there is a palpable demand for new solutions to identity management that requires massive shifts in the way we think about identity and how we evaluate it. We can look to blockchain for hope but the truth is that it is still incredibly early to say how it can best help and where.

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CoinCentral’s owners, writers, and/or guest post authors may or may not have a vested interest in any of the above projects and businesses. None of the content on CoinCentral is investment advice nor is it a replacement for advice from a certified financial planner.

Marshall Taylor

Marshall has had a colourful background in Sociology and Marketing Design where he worked for the last half decade energetically crafting and engineering the consumer decision process. His interest and drive for DLT is motivated by how it affects people and especially those who need it most.

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